Legislators Vote

Simultaneous games and simple sequential games without randomness
and with perfect information.
Material are two gambit files, LegislatorsVote2.gbt
and LegislatorsVote3.gbt
for the simultaneous versions, and ...

LEGISLATORS' VOTE: Three legislators vote whether they allow themselves a salary rise of $2000 per year.
Since voters are observing, a legislator would estimate the loss of face by having to vote for a rise as
$1000 per year. The payoff for a player is the sum of the money won from the rise (if there is one) minus
the value for the loss of face if one occurs.

1. Simultaneous LEGISLATORS' VOTE

What happens if all three have to vote at the same time?
Remember that we describe the game not by one bimatrix but a system of trimatrices
(matrices with three entries in each cell), one for each one of player A's moves.
Note that all payoffs are given in hundreds in this chapter.

A votes for raise

C votes for raise

C votes against

B votes for raise

10,10,10

10,10,20

B votes against

10,20,10

-10,0,0

A votes against

C votes for raise

C votes against

B votes for raise

20,10,10

0,-10,0

B votes against

0,0,-10

0,0,0

In the worst case, a player is better off voting against a rise,
since she can lose $1000 in the "voting for" case, but cannot lose in the "voting against" case.
Therefore the maximin moves are voting against a rise.

None of the moves dominates another, strongly or weakly.

Note that the "best response" concept doesn't apply to three or more player games.

Let us now describe how to find all pure Nash equilibria.
Thereby we give a procedure that can be used for general simultaneous games of more than two players.
First we look at player A. Among all outcomes with fixed moves of all other players,
we mark those where A's payoff is maximal. We underline this payoff.
For instance, there are two outcomes where B votes for a raise and C votes for a raise,
and the one most favorable for A (the "best response" to that situation) is where
A votes against a raise. If B votes for a raise and C against, then A should vote for a rise.
The same in the symmetric case where B votes against and C for a raise.
If both B and C vote against a rise, then A should also vote against.

The same analysis could be done for B and C. When we look at B's "best responses",
we underline the second entry of those cells in each of the four columns maximizing this second entry.
When doing it for C, we underline the third entry of those cells in each of the four rows
maximizing this third entry.

Finally, the pure Nash equilibira are those cells where all three entries are underlined.
Our game has three pure Nash equilibria, and the corresponding cells are shaded.
One is when all three vote against a raise, and the other three
are when two of them vote for a raise and one votes against.

2. Simultaneous LEGISLATORS' VOTE with abstention

The loss of face by abstaining is relatively small, only $200.

A votes for raise

C raise

C abstains

C against raise

B raise

10,10,10

10,10,18

10,10,20

B abstains

10,18,10

10,18,18

-10,-2,0

B against raise

10,20,10

-10,0,-2

-10,0,0

A abstains

C raise

C abstains

C against raise

B raise

18,10,10

18,10,18

-2,-10,0

B abstains

18,18,10

-2,-2,-2

-2,-2,0

B against raise

-2,0,-10

-2,0,-2

-2,0,0

A votes against raise

C raise

C abstains

C against raise

B raise

20,10,10

0,-10,-2

0,-10,0

B abstains

0,-2,-10

0,-2,-2

0,-2,0

B against raise

0,0,-10

0,0,-2

0,0,0

Again the maximin moves are voting against a rise. Again there is no domination.

The pure Nash equilibria are found using the same method as described above.
There are seven of them, namely
when two of them vote for a raise and one opposes, or when one of them
votes for the raise and two abstain, or when all three vote against it.
The corresponding cells are shaded again. Two cells miss the Nash criterion of
all three entries being underlined barely---the three cases where two players are opposed to
a raise and one abstains. For the two players opposed this is a best response to the situation,
but for the third player it is not, this player should deviate and also say no.

Let me also note that the "Gambit" program
(see the main page here)
[McKelvey, McLennan, Turocy 2007]
finds 20 Nash equilibria in mixed strategies. We will talk about them later.

3. Sequential LEGISLATORS' VOTE

What happens if A has to vote first, then B, then C.
(This is a variant of a game described in [Kaminski].)
The backwards induction solution is: A votes against raise,
getting a payoff of 20, whereas B and C both vote for
a raise and get 10 each. The first player has an advantage.
He or she is allowed to keep his or her face, whereas the other two have to
get the raise passed. If the order in which the three legislators
have to declare their opinion in public is random, each one can expect the average of the
three expectations in the game, namely a payoff of 13.3 hundreds, more precisely. of $1333.33.

3b. One player is more scrupulous or more vulnerable

The evening before the three legislators have to vote about the salary rise,
sequentially and with an order chosen randomly and not yet known,
two legislators are sitting in the hotel bar.
Then suddenly a journalist calls, telling them that at the election district
of the third legislator, Jim,
large crowds are demonstrating against a salary rise for the legislators.
That means that Jim's loss of face if voting for a raise would have to be valued
even more than $ 1000 worth.
How would you react to these news? Get another beer and celebrate Jim's bad luck?
And is it bad luck for Jim? May it even affect you?

The answer to this question is the same as for almost all questions:
"It depends." Namely, it depends how much Jim's loss of face is now worth.
If he values it less than $ 2000, then he carries the whole cost of the changed
situation. If he, however, now values it more than $ 2000, then he will
never vote for a raise. If the other two know this, they both have to vote for
a raise, even when voting first. That means that in that situation the expected
payoff of the other two legislators sank from $1333 to $1000, and Jim's expected payoff
raised from $ 1333 to $2000. He is getting the raise for free, provided the
others just know about his changed payoff.

... considers his loss of face worth -1500$

... considers his loss of face worth -2500$

The first (red) player ...

The second (blue) player ...

The third (green) player ...

If the order in which the three legislators have speak up and tell their vote in front
of everybody is random, then the expectations of the three players are just the averages of the three
payoffs in the three games. Therefore the scrupulous player will expect the average
of 20, 15, and 5 hundreds, i.e. 13.3 hundreds, $13333, as before.
The other two players however expect the average of 10, 5, 10, 5, 10, and 7.5 (hundreds), which is 7.9 hundreds,
$ 7917.
Interestingly being more affected by public opinion
doesn't decrease the scrupulous player's average payoff but the payoffs of the
other two players from $ 13333 to $ 7917!

What happens if this other player is more scrupulous than the other two,
but only slightly more? Let's assume his face is worth $1500. Then
the first game tree, where Mister Proper has to move first, doesn't
change. If Mister Proper moves second, the payoffs are now 20, 5, 10.
If Mister Proper moves last, the payoffs are 20, 10, 5. Nothing changes
for the other two, but our scrupulous guy is worse off than before, due to the damage
with his face,

The conclusion is that being scrupulous hurts first the guy itself, but if it exceeds
a certain value, then only the other two legislators have to pay.